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60 IN : 38 OUT

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Experience is the name so many people give to their mistakes. — F. Scott Fitzgerald, This Side of Paradise (1920)

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Cash Equivalent

Arul Kanda, President, 1MDB, might have at least seen — “I don’t bluff you, they are real” — touched and counted them before they were photographed (above and below) and he’d agree to include them in his company’s 2014 Balance Sheet, the right side column titled Assets. It says: ‘Cash equivalent, available for sale, 13,388.87 million ringgit

Yet, no buyers. Nobody, not a soul, wants them. Not even the good Arab brothers of Najib Razak and those Abu Dhabi banker friends of Arul. Strange, of course, but it just goes to show that, in these times, brothers and friends could disappoint you.

Still in their cartons, flown out of Seychelles, stopping over at the Cayman, British Virgin Island then Medina and Abu Dhabi (in that order), the cache of ‘cash equivalent’ in 100 and 50 ringgit banknotes eventually arrived in Singapore on MAS 370 after the flight was prohibited from landing in Kuching and detoured to the Indian Ocean. At Changi, the stock was unloaded. Present, waiting in 34 degree heat since morning, Swiss bankers from the bank BSI made an inventory. When done, one of them said to Arul, who had accompanied the shipment: ‘Sorry, we can’t buy them for francs. You can try exchange them at Bugis Street. Best of luck.’

The situation went on for a year then two and, still, no buyers. Ah… never mind. Maybe those godless Chinaman might put it to good eternal use on the next qingming 清明.

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Dear Reader…

For certain 1MDB is at the end of its short, nasty and brutish life. Six years now, going to seven. 2009-2016. Which is, of course, unusual given its vast backing in material resources and international political and financial connections. The intent of this post was, therefore, to construct a single, uninterrupted narrative of a commercial creature from six years ago to the present, milked for every drop of a dime, then stripped and dumped when it became a political hot potato.

There is no intent here to be political even though that is how the company has become. And if there is fraud, it would be self-evident. 1MDB is unique for letting us discover who we are, the melding of politics to commerce, the corruption of our souls, and a great indifference to a greater good. Assembling the disparate information thrown up over the course of a year then building a coherent story, beginning to end, is like looking into a mirror’s reflections. It isn’t nice, what you see.

This reconstruction of 1MDB is also like a biography somewhat, so we stay on the side of evidential facts as best as they can be ascertained and this is not necessarily a straightforward thing. Even the financial accounts lie, and  events happening to 1MDB have been stranger than fiction.

Out of necessity, this post was originally set to a certain, moderate length for clarity’s sake and in deference to readers who are unfamiliar with international finance and accounting principles and for those without the patience for counting beans. Then it grew and grew and grew. (The curse of computer word processing: no end to revising.) One way to deal with this amount of text in a single page is to break it up. Hence, there is a division of three main parts each given subtitles, 1. The Pillage of a Nation; 2. Stages of a Scam (which sets 1MDB’s short existence into three stages, 2009-2012, 2012-2014 and at last 2015 to Present). The final part is 3. God’s Deal to End All Deals. Within parts, anecdotes and little captions are further used to break the monopoly of text.

In total the main text on the life and times of 1MDB stands at 10,000 words. Be comforted though in the thought that it takes far less — far, far less — effort to read than to write which, really, is the work of comprehending done in the name of the readers. There is no reason for you to rush through this, is there? Story nuggets and photos will break the horror of horrors: monotony. Use them to break up your reading as well, if you must.

Jian, although she always comes first, had to be pushed back to the bottom of the page. 我的爱不好意思。

For informed readers, it is hope that this will help to further elucidate on a difficult and worrisome subject which, with great ethical ramifications, will stay with this country and its peoples for a long time. Thank you for your understanding.

This is Part 2 of Paradise Whitewashed, Looted. Part 1 is here.

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The Corruption of a Nation

Political funding of the nation continues …

There is no law against political funding, said Azalina Othman in 2015, Parliament House. Nobody replied, “That may be true, Lina. There is also no law against lying. But there are laws against corruption, the corruption of souls.” And then also to say, “Have you any idea — any at all —  what is being done to these people and not just them but entire generations, what you’d bring out in them? And please don’t say you’ve no hand in it.” (Photos from OTB)

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Lament for a Nation

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1MDB. RIP. 2009 – 2016

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najib1

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For 60 billion, what did a nation get?

Missing Money

Money in, money out: 60 in, 38 out

Image 1: The core premise of the Diagram above is that Money-In, entering 1MDB, must at least equal Money-Out. This is for the reason that everything it owns and spends on (including daily expenses) from Day One were derived from borrowings, that is, loans and money advanced. It had no internal earnings.

The conclusion to be derived from that premise and the Diagram lays in this question: Today, six years after 1MDB’s creation, what has it got for 60bn ringgit? There is a metaphor cliche for the answer: garbage in, garbage out.

(To enlarge and read, click on that and other images. Source: PAC, Sarawak Report, The Edge Daily, 1MDB, Tony Pua, JMD, Wall Street Journal, Arul Kanda.)

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DIAGRAM EXPLAINED

I. Is this for real?

Two things are striking in the Diagram which is, of course, made up. Only the numbers were copied from varied sources. One, MYR 60bn went into 1MDB. Really? Two, if ‘money-in’ is 60, and ‘out’ is 50, then missing is 10bn ringgit. Can that be true? This is less than Mahathir’s 42bn missing.

  • Answer One. Recall that every sen required of and spent by 1MDB is on loan, down to rents, salaries, paying for Arul Kanda’s morning tea and the curry puffs for Rahman Dahlan when visiting. Nothing is generated internally. Therefore, money-in is … money in. Not all money-in is borrowed, such as a bank loan. An exception would be a ‘donation’, but it is still money in.

Which leads to the next point: Did 1MDB really borrow 60bn? In the accounts, wasn’t it 42? At most it was 50, if one goes with Parliament’s Public Accounts Committee (PAC).

1MDB’s debt in 2014 fiscal year was stated at 42bn (2010, 4bn), a figure close to its 49bn (2010, 4bn) in total liabilities. Within liabilities is this unusual line, ‘Other payables including derivatives’. It totals 4bn (2010, zero) which, as it turns out, were derived from loans. Add that to debts is 46n. Even if taking just the namesake, debt alone makes up 85 percent of liabilities (2010, 98 percent). This is like a one-in-a-million case. But 1MDB is not your normal company which, at 42bn, puts its equity-to-debt ratio at 1-to-42,000. There is no known public company in the world such as this.

Fuzzy, obfuscating language — ‘fund units’, ‘level 3 assets’ — because it is permissible riddle the critical aspects of 1MDB’s accounts. Some (Eg.1, Eg.2), Arul Kanda in particular, made a big deal of the accounts as audited, therefore all monies as being accounted for and hence ‘safe’. Ambiguity aside, there has been outright tampering (here, here and here).

Those aren’t the only problems with the accounts which are put out as if after they had been negotiated upon between Directors and auditors. Accounts are not treated as a reflection of independent and objective financial standing — a company owning or owing such and such. Here is a share I own for which, and it is real and if sold tomorrow, I shall get so much. Instead, such things, lodged in some faraway secluded islands, are turned into an argument that leaves financial reporting as opaque as road tar, concealing truths and reality on the one part, fraud on the other.

There is another, technical reason for not to wholly rely on 1MDB’s financial accounts. Each year’s balance sheet captures the financial status at a fixed point in time, that is, accounting year-end. In 1MDB, Mar 31. Thus, if 100 ringgit was borrowed today and repaid a month later then repeated and repeated, this rolling debt, if stopped before year-end, isn’t captured in liabilities. Nor will accounts show how the money might have been spent, producing assets and had not end up in someone’s pockets.

In June 2015, USD 1bn (MYR 4bn) came into 1MDB from IPIC to repay a loan taken out earlier with Deutsche Bank and others. (This, it appears, is a matter separate from the 1MDB-IPIC quarrel over USD bonds.) This money isn’t considered as debt, not in a strict sense. In the Diagram, though, the IPIC money is counted into Money-In.

The PAC report is by far the only publicly available compilation in a single document of 1MDB spanning six years, 2009 through 2015. Its report is based entirely on evidential record. No record (bank receipts and so on), no report.

But, the PAC’s primary source of information is the Auditor General, an accountant. And the Auditor General’s primary sources of information are 1MDB’s auditors and before them Arul’s accountants. See the connecting links and what this means to PAC’s work? In any case, the PAC is all that one has as legitimate authority and which Najib Razak and Azalina Othman now dive into, like it was a roadside bush of tall grass, to hide themselves from a scandal pursuing them. (Before it was the Attorney General and Bank Negara.)

From available documents, the PAC listed 26 cases of money transacted and — this is crucial — all being monies registered as entering 1MDB. Registration may be in the form of revolving credit, bonds, cash and so on, but they still constitute money into 1MDB. These transactions were at a rate of one every 4 months over 6 years, and most of them were upwards of 500mn ringgit each.

Money-in totaled is 60.1bn (plus/minus 100mn for rounding up errors). This include all money in US dollar, total 10bn, which is given a ringgit value at the fixed rate of MYR3.30 to a dollar. Between 2009 and 2015, that rate fluctuated between 3 and 4 but nearly all the foreign currency loans were taken prior to 2015 when the ringgit depreciated greatly.

PAC’s list and Arulian accounting share a critical difference: one speak of transaction, the other as money borrowed from a financial institution. The first encompasses the second, but not the other way around.

  • Answer Two. The IPIC case helps to answer Question Two: Is 10bn (60 less 50) missing? Or stolen?

Money-out is simply the flip side of money-in — and this, too, is vital — after passing through 1MDB over the past six years then aggregated. IPIC’s US 1 billion: where did it go after that? Short answer: don’t know but it doesn’t matter since one’s concern is aggregated sums. Neither the PAC report nor 1MDB accounts nor the Auditor General provides the answer.

Similarly, and on the flip side, 1MDB has recorded paying IPIC, sometime in 2015, USD 2.4bn as part of a set of penalties for reneging on a USD bond deal that promises to surrender Edra’s power plants to IPIC. The payments are reflected in 1MDB’s accounts, having paid into yet another faraway Caribbean island company, but not in IPIC’s. On paper, 1MDB is square, which however raises another question: where did the money come from? (Recall that producing nothing, selling nothing, 1MDB brings in no money, has no cash-in-hand.)

That episode isn’t talked about as a failure to probe deep because accountants don’t ask themselves that sort of a question: that is, Out, where to; In, where from? Nor do they need to. Their singular preoccupation is matching total assets to total liabilities, expenses to income, left side to right side on a T-table, even if they have to drive square pegs into round holes, and even if they have to make A4 cutout paper look like banknote currency.

This is the peculiarity with 1MDB. Although subjected to the same accounting rules as a factory making soy sauce, 1MDB is not your ordinary type of business. It is not a hotel nor a factory where scrap iron enters and out comes nails sold to RPK to hang up Najib’s scrotum on his bedroom wall. 1MDB financial accounts tell this difference clearly. Like it were a humongous laundry machine instead, monies, such as the IPIC billion plus the rest, are thrown in, swirls around and are tossed about the 1MDB tub. Doors open, doors close, money enter, money leave — and all for no apparent rational reason and in utter indifference to its stated purpose: buy land, build factories, sell motor oil, sell anything, make money.

If 60bn went in and out came only 50bn then the 10bn isn’t missing. Not really. It has been squandered, frittered away, all on expenses including Arul’s Australian steakhouse lunch, his paychecks, cocktails and as fees to his banker friends and lawyers sponging on a national debt by manufacturing agreements between IPIC and 1MDB. Each time a loan is taken — and there were dozens — it costs money, and this is paid out, ironically, from the loan itself. Bank interest, fees, commissions are all expenses. This sort of debt-related expense made up nearly all of operating in 2014 fiscal year, about two billion ringgit, though far less in the early years.

At the rate of one loan every four months — imagine ten photocopiers in two rows running dawn to dust — 1MDB make careers of people borrowing money. It looks like that’s all they do: borrow money, spend money then borrow again in an endless cycle. That the 60bn should enter the company then fail to deliver the equivalent sum in assets, less, say, a billion a year for operating (6bn total after 6 years), then it is conclusive to say that 10bn is wasted. And this money squandered is worse than being stolen or missing. It is completely irrecoverable.

If, however, Jho Low had stolen the money, Khalid Abu Bakar could be dispatched to find him and then to shake him down so bad he’d throw up every sen he swallowed. Which is also to say that all monies missing or lost would have had, by its internal definition, left the company already and that they are with somebody, somewhere.

That vanished money is contained in the 50bn ringgit money-out. Less actual assets (22bn), less operating (1bn x 6 years), the missing or lost or stolen money could amount to 22bn minimum (50 – 22 – 6).

There is another, equally shocking conclusion from the Diagram: all that Shahrol Halmi and the Directors have to show for using 60bn ringgit and six grinding years are some parcels of land and aging power plants collectively worth no more than 22bn, and that’s at the most generous price any Arab donor cares to pay for. Shocking because if 60bn was put aside in the US Federal Reserve, where money is backed by gold, not A4 copypaper, and where it would be untouched and unmolested, while earning 5 percent interest, it would produced a yearly profit of 3bn, 18bn after six years, total 78bn (60 plus 18). All cash and no equivalents. And, today, without spending a dime, money safe, Najib gets to keep his job and Arul won’t need to come back from the desert.

Or, maybe that was never the design from the start…

The PAC report is a starting point for money ‘missing’, although the term it uses is, ‘unverified’, meaning their existence are questionable. The total, however, is USD 7bn, 28bn ringgit if taking the current USD1 to MYR4 exchange rate. Those cases are:

  • US$1.03 billion, Good Star;
  • US$3.51 billion, Aabar BVI,
  • US$940 million ‘units’,  BSI Bank; and
  • US$1.56 billion, 1MDB Global Investment Ltd

If USD 7bn were to use a 3.30-to-a-dollar rate, it comes to 23bn ringgit. This still might not be the whole story. PAC’s record of unverified assets is based purely on available documents and not on mathematical deduction that’s relied upon by the Diagram. Below, the initial ‘Money-In = Money-Out’ equation is expanded:

  • Money-In = Money-Out = Purchasing Cost of Fixed Assets + Operating Cost.
  • 60 = (50 + 10) = (22 + 10) + x, where ‘x’ is a question mark speaking to something missing or unaccounted for.

Those given numbers don’t square up on the equation, and something is wrong. Sixty billion in money-in is assured. Money-out at 50+10 is arguably close to the truth. Trouble starts when the equation is broken down one level.

Be generous to Arul Kanda and, say, 1MDB have real, tangible assets at 22bn (Edra, Bandar Malaysia, both sold, plus TRX and other land remaining) and it had used up 10bn in operating expenses the past six years. Where’s did the rest of the 28bn (60 – 22 – 10)?

1MDB’s 2014 accounts give a clue to the answers in two lines, the two largest lumps: (a) ‘available for sale investments’ 13.5bn, and (b) ‘intangibles’ 8.5bn. Total: 21bn. (There is still 7bn, 28 less 21bn, unaccounted for but this is tolerable because the Diagram aggregates sums, whereas 21bn reflects a single shot from the arrow in 2014.) The second ‘(b)’ has to do with Edra; don’t quarrel with it. The first, the equivalent of USD 4bn, is the stuff involving PetroSaudi, Jho Low and Tarek Obaid.

1MDB balance sheet ending March 2014 has yet to flesh out the IPIC deal in full so that as the scams go deeper and farther in time, the language, the wordings and the numbers get more crooked and financial statements get more pages and thicker.

By now 1MDB being scammed is as clear as day. But without actual attributable numbers, that conclusion is, paradoxically, only a suspicion, a guess. Hence, the best reasoned judgment is to say ‘losses’ and 28bn (USD 8.5bn) is a fair, quantifiable, minimum number. And this is shocking, averaging almost 5bn a year. Any other company would have closed shop a long time ago.

In 1995 UK’s oldest merchant bank, Barings, shut down over a fraction of what 1MDB had lost: MYR 2bn v. 28bn. This comparison is made to mean that, after the 1MDB-PetroSaudi debacle in 2009/2010 (when almost MYR 7bn  was lost) Najib ought to have wound up 1MDB if the failure in 2009 arose from genuine human mistakes; and he himself has acknowledged that he, too, is human. It implied innocence of error. Instead 1MDB continued as before, and its officers went on with the same fraudulent conduct three years earlier.

Or, maybe, there wasn’t any error after all…. In that sense, Malaysia’s money didn’t just vanish, such that nobody knows where they are or that what had happened to them. Nearer to the truth, it’s probably this: Carts of gold were shoveled into 1MDB the front door but out came scrap metal through the factory rear door. Then for a year Mr Arul Kanda, the newly hired camel storekeeper from Abu Dhabi Commercial Bank, systematically repainted those nails a gold color to avoid their discovery by QC inspectors.

The two most frequently cited cases of Arul’s handiwork are:

  • (1) in 2009-2012, MYR 10bn (USD 3bn) to Jho Low, Tarek Obaid in Good Star and PetroSaudi Int’l (PSI), and
  • (2) in 2012-2014, MYR 16.5bn (USD 5bn) to Khadem al Qubaisi and Badawy al Husseiny in IPIC/Aabar BVI.

The modus operandi in them are near identical: money enters 1MDB, passes through its internal channels, sent out, then over the years they are turned into paper, ‘fund units’ and ‘options’ respectively. Miraculously, gold turns into scrap nails, so useless that nobody wants them, not even Arul’s former employer at Abu Dhabi Commercial, and not even discounted — 50 percent off — 2 dollar units for a dollar! All the glorious pledges (made jointly with the Saudis and the UAE by Najib Razak in 2009 and 2013 respectively) of ‘high impact, strategic investments’; of USD 3bn capital poured in, of gold lining the street of Tun Razak, 26bn worth; of 540,000 jobs to be created; of 250 ‘world leading companies’, all had turned out to be false. Every word in them.

The flowchart above have numbers drawn from 1MDB accounts (below) which, pictured the way Malaysiakini did, gave those foreign deals the appearance and the force of veracity and respectability. Yet, beneath appearances were the ingredients and the qualities of one scam following another. (See section, ‘God’s Deal to End All Deals’)

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Jho Low’s Good Star is the precedent, the domestic model case not only of gold in and scrap out but, in financial circles, of mind-bending reality. It is reminiscent of the paper-inflated assets that fell Lehman Brothers, J.P. Morgan Chase, Merrill Lynch and Bear Sterns at exactly the time of Jho Low and Good Star. Even some of the Wall Street names — Merrill, Blackstone and Bridge — were sequestered by Low who, with friends, after taking USD 3bn and waiting three/five years suddenly shows up with the money and with Arul. In Arulian vocabulary, it was ‘accounted for’. But this ‘accounting’ was pure paper work, done by transferring that 2bn of the 3bn sum (from, again, a piece of paper drawn up with PetroSaudi) to a British Virgin Island company named Brazen Sky then onwards to Bridge Capital owned by Jho Low himself. In Bridge the money came to be called ‘fund units’. Conveniently, half the money was spent (no receipts?). The other half, worth USD 940 million, was passed to the BSI bank in Singapore.

Here a problem confronts the PAC: Verification. Arul says the units are a ‘cash equivalent’, ‘ready for sale investment’, and this is with documentary evidence. If Tony Pua, on the other hand, was to suggest fraud, then the onus was on him to prove that the documents were false and that USD1 bn worth of units are mere A4 paper cutouts. For Pua, this is an impossible situation

One result is that the PAC, to demonstrate its impartiality and objectivity, has to accept, until proven otherwise, that the units equal cash, both being quantifiable assets. This leads to the PAC conclusion that USD 1bn is still around and available, only unverified. But, in this backhanded way, the PAC accepts Arul’s assumption: cash equals cash equivalent, US dollars equal ‘ready for sale investments’.

The sacredness accorded to accounting is the reason why the PAC and Pua have caved in to Arul’s goobledegook. But auditors are like tall weeds of grass where those pursued dive in to hide from their pursuers.

The Diagram does not adopt accounting principles. If there is money, Arul must show it. Not Tony Pua. And, the only acceptable evidence there is is, Show me the money. This, therefore, is the central premise in the Diagram. One ringgit in must equal 1 ringgit out. Gold in, gold out. Nothing in between.

Two conclusions are drawn from the Diagram.

  • 1MDB cumulative debt, 2009 to 2015, is positively MYR 60bn (money-in). For that money, all 1MDB had to show were parcels of land and half a dozen power plant companies, collectively, worth no more than 22billion, even at the most generous and that is at the point of sale as opposed to cost of acquisition. (But why are we generous to thieves?) That is, nearly two out of every three ringgit was frittered away — squandered or stolen or both, that is not the point.
  • Of the 60bn money-in, 28bn has generated nothing. Nothing except Options and paperwork. Gold went in, garbage was returned. Of the 50bn being remitted from 1MDB (money-out), that is, accounted for or documented, whatever the veracity of the documentation, at least half are missing, unrecoverable, looted or all three. In sum, 1MDB took from the nation gold and return to it coffin nails.

  In a nugget form, this is 1MDB’s current financial receipt after six years and 60bn (E&OE):

  • Land & power plants, sale value: MYR 22bn
  • Outstanding loan principal:  MYR 30bn
  • Leftover land assets, TRX, Pg: MYR 6bn
  • Cash missing, stolen, wasted or frittered away: MYR 28bn

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II The Mechanics of the Diagram

Notice the dotted line running horizontally across. It splits the Diagram into two halves, top for ‘money in’ and bottom for ‘out’. Similarly, there are two halves produced by a vertically division, also down the middle. Left of this imagined vertical line is the offshore or foreign component of 1MDB’s finances. Right is domestic.

Sliced in this way the Diagram produces four quadrants, equal squares, which in turn throw up some salient features of 1MDB borrowings and spending.

  • (a) Including operating expenses (but, really, how many curry puffs can Arul eat in a day?) the top half in cumulative borrowings must equal the bottom half of all money remitted, however they are used up eventually. At the opening bell, in 2009, 1MDB borrowed MYR 39mn for the ostensible purpose of ‘working capital’. From that modest sum, 1MDB graduated by Year 3 of existence to hundreds of millions then billions. Where, on a few occasions money was borrowed to repay an earlier loan that came due, these transactions are counted in. Accounting principles binding a normal business forbid this double counting then totaling these debts into liabilities. But 1MDB is not normal, not even as ‘sovereign wealth fund’ that bankers tell Bloomberg and they tell the world. It is neither a sovereign nor wealthy nor a fund. Its business is recycling money, and ‘money-in’ is not liabilities. It is gold delivered to an outfit, a factory equivalent, after which we’ll see what comes out.
  • (b) Almost the entirety of 1MDB’s borrowings were intended for domestic investment. Hence, there was little need for US banknotes. Yet at the top left side quadrant, the USD part of ‘money-in’, made up more than half of money raised. Goldman Sachs alone arranged for two or every three dollars going into 1MDB, 21bn ringgit total. There are enormous disadvantages (expensive, high fees) and risks (exchange rates, uncertain future ringgit income ransomed to fixed USD payments) with USD financing of domestic, ringgit investments. Most governments want to avoid it unless necessary.
  • (c) Of the money-out, money missing and/or defrauded fell entirely on the USD side (left, bottom, second quadrant, boxes shaded gray). All took place abroad. There is a reason for it. And, one way to think through the answer is to follow this argument: If you are going to defraud a company, why bother with the circuitous, bothersome foreign route, creating companies and bank accounts in the process? Why not simply cream off money borrowed in ringgit from, say, Maybank? (Recall that Bank Negara is an obstacle to letting money flow from ringgit into US dollar or vice versa.) Those two questions are the flip sides of the same coin — money in transit offers the best chance for carting off the loot. At home, so short is this transit route, money out one account then going into another, leaves little room in between to slip out the money. Outside Malaysia? Help yourself; it’s a buffet treat. Which explains why one of Jho Low’s fellow racketeers sang to his friends when the money landed: “It’s raining twinkle, twinkle stars.” (Twinkle stars is a metaphorized term from Seet’s actual use, ‘crystals’, which he spelled as ‘cristals’.)
  • (d) For 60bn, all that 1MDB got back in return was 22bn worth of true, inflated but tangible assets (domestic quadrant, right side), the ones demonstrated to be saleable and weren’t bogus. How did they do it, getting three times the money’s worth of actual assets? One answer: 1MDB has no qualms borrowing twice on the same pretext and everybody look the other direction because they are, after all, dealing with Najib Razak. In May 2012, it justified borrowing 6bn from a Maybank-led syndicate to buy Tanjung Power then, on the same excuse, also Tanjung, given at the same time, it borrowed through Goldman Sachs USD 3bn. USD 3bn is MYR 10bn. Add to it the MYR 6bn Maybank loan, 1MDB had doubled its money-in for what it needed to come up with for Tanjung, 8bn.

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III. The Failure of the PAC

Data presented in this post and in the Diagram rely heavily on the report by the PAC, which to all intents and purposes was a complete failure. Its members speak at cross-purposes, even from within the same camp, the DAP most evidently.

It is to be expected that obstacles will be thrown at their investigation, a charade in fact when it is restricted primarily to interviews and reading the Auditor General’s report. But, more disadvantageous to the PAC’s work than those obstacles are the questionable competency of the committee in general, starting with Chairman and his doctor deputy, the latter of who spends his entire life peering into the microscope looking for bacteria and, yet, fails to find the source of 1MDB’s infection and sickness.

Other than to see if Najib Razak had stolen money, its purpose is ill-defined and, consequently, offer recommendations that range from the absurd to the trite. The dissolution of the Board of Advisors? By the time of the report, Arul Kanda had reduced 1MDB to a hollow sea shell. There is nothing left to advise. One result: Najib, quick to capitalize on the PAC’s limpidness, not only use its report to reaffirm the Attorney General’s decision that exonerated him. But it was also the perfect excuse to cut the company loose from his government and he himself. That is, to let it drift out to the sea and, in time, be forgotten. Like MH370. Out of sight.

This post is an attempt to do PAC’s work, in particular from where it had left off failing. The data is there, PAC members have only to ask the the obvious questions on that information. And it isn’t difficult. Where did 60bn ringgit go? For every 1 billion borrowed, how much will it cost the nation to repay in full? What did Malaysia get for borrowing and spending 60 billion? Why borrow in US dollars? Why so much? How much of money borrowed overseas had been brought home, ashore, the intended placed? Why? What have been Arul’s explanation into his work at 1MDB? If he gets footsie, minute it then publish. After all of which, the PAC should be able to give a reasoned judgment into 1MDB’s state of affairs measured against its stated aims, which are well documented. Pushed far enough, those questions might lead to new discoveries, even if tentative ones.

There is a stench in Putrajaya, can anyone smell it?

But what came out instead? Platitudes. And smug: I told you so. I’m innocent. Every sen has been accounted for. There is no money missing. Even Parliament has verified that and agrees. In this way, Parliament reaffirms its impotency. One might as well just give up, go home and watch movies with the good doctor.

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Cloths of Heaven

Had I the heavens embroidered cloths…

But I being poor, have only my dreams

Tread softly, my dear, for you tread on my dreams

who's who

Key players

Image 2: Where’s our money, Najib? Have you seen it? (Click on image. Poetry cited with apologies to Y.B. Yeats.)

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The Don Quixote of 1MDB

Image 3: In the sad, sorry annals of 1MDB, Arul Kanda, a lead character, is a bald, aging man who, beginning 2015, goes out to save the company. There he finds money in ‘units’, he mistakes an island (Aabar BVI) for a desert (Aabar, Abu Dhabi), sees a co-operative in a fraud, that a loan is another word for capital and believes that the things a company buys are stashed in staircases marked level 1, 2 and 3. USD cash is now at Level 3.

This reminds of a mad man named Don Quixote who, 400 years earlier, seeing himself as a knight, goes out to rescue prostitutes because, he believes, they are virgins. He stays in country inns he thinks are castles and windmills are giants in army formation.

Above, Arul might be talking to reporters: “See anything? My hands are up. You might think I surrender, that I give up on 1MDB. Wrong! I’m just resting my shoulders.

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1MDB tentacles-chartThe Tentacles of a Pillage

 Image 4: A Sketch — Who’s Who. To enlarge click on image. (For taking the trouble, 感谢 Khairil Yusof)

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1. The Pillage of a Nation

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Context gives depth of meaning to a Diagram, such as the one on top, which is the equivalent of knowing the standing of one’s bank account. Like the savings passbook without the transaction details. This context, provided in Stage One through Stage Three below, attempts to recapture the moment of 1MDB’s creation then follow it through its short, nasty, brutish life until the present, and to its un-bundling six years later. Chronologically ordered, those are factual events but if not they would be qualified.

Before that, a proposition: The key character (in the making of 1MDB and the final lap of its pillaged life) is Arul Kanda, not Najib Razak, nor Shahrol Halmi nor Jho Low.

Recall that six years ago, there was a one-off plunder done through the machinations of 1MDB-PetroSaudi JV and Jho Low. It didn’t stop there. The pillage continued until as recent as May 2015 (in June that year WSJ broke the 1MDB story, but only on the PetroSaudi part), by which time Arul was fully in charge.

Nothing is known of money going into Arul’s pockets. But through him, by his dismantling of 1MDB, one gets to see the disparate parts, previously tucked away, and so to gather them up and patch them for a sense-meaning into the company’s existence. 1MDB’s un-bundling offers a public spectacle — not that it was Arul’s intent — in a sequential series of events, linked back and front with a varied cast of characters.

Arul is key character also because, as he unpacks and takes apart 1MDB (the ‘rationalization plan’ but, really, a garage sale as Americans would say), piece by piece, he has to know beforehand where to start, why so and, after which, to proceed by anticipating the outcome of each step — and, crucially, in each method. If, for example, the Edra IPO had gone ahead, the take home proceeds would have been vastly different from, and most certainly more than, the negotiated sale with China’s CGN. Compare those two methods: IPO and direct sale. One is like a street, sidewalk sale of DVDs, the other a one-off negotiated supply contract with Rahman Dahlan’s ministry. The first has many buyers, is time consuming, prices and earnings difficult to track whereas the second is restrictive, one buyer only but a clean cut.

Arul’s task of rescuing 1MDB from its indebtedness is, paradoxically, wedded to the task of its dismantling: to reduce debt is to sell things because those things, land and plants, came from the debt, nothing else. In effect, therefore, he joins in the pillage by taking out the loot. Arul becomes a two-face Janus god, looking in opposite directions, both destroyer and preserver like an Indian deity. This explains why he has always been pussy-footing with answers and vociferous in defending 1MDB’s morality.

Unlike the conventional corporate rationalization or restructuring, Arul’s work is straightforward. It only appears mind boggling because of the jumble of stacked up loans so that, to untangle them, requires sitting down with paper, pen and calculator. Much work is, therefore, plain arithmetic, for in 1MDB rationalization they are no jobs to preserve, no lives to worry about, no factory production to consider, which products to keep selling, which ones to drop. Land and plants were bought lock, stock, barrel. They go out lock, stock, barrel. He has only to find buyers which isn’t his task but it comes from Najib’s government underling connections.

Stripping apart 1MDB is a job to suicide. With each sale, Arul is a step closer to ending his tenure; poor man, he hadn’t begun to realize it until almost the end. The more things he disposes, the lesser there is to do. More free time gathers about him. Soon he is talking to the Press more often than all of Najib’s ministers put together. He attends PAC meetings, conduct debates, speak with Umno and MCA politicians like he is holding a classroom lecture. He acts dramatic — nay, conceited — when he tells The Edge he had done more than he had signed up for. Reporters, always naive to the ways of the world, marvel at those remarks as if here, before them, is such a selfless character. They wouldn’t have guessed: he was just a desert Don Quixotic. Politics and PR speeches were the top items on his job spec, not selling kW. Talking was the only thing that endured, and not 1MDB’s assets that were trolled out like acquired beauty queens instead of dirty factory places full of soot. At times when the numbers couldn’t add up, Arul would try another route, remembering his LSE education: if you can’t solve the problem, redefine it. So, next morning he is philosophizing with Tony Pua. It is all metaphysical, not for philistines, the descendants of tree dwellers in Najib’s Cabinet: What is the definition of cash? When is a fund unit cash? How does an Option ceases to be optional? And finally to this: What is the ultimate nature of Reality?

The answer comes from Ludwig Wittgenstein: Reality comes only from language, that is, only if you can speak it. “Whereof one cannot speak, thereof one must be silent.” Thus, money is real if you can give it another name. It is called ‘fund units’, interchangeable with ‘available for sale investments’.

Below, then, is an attempt to state the ultimate nature of 1MDB: Why is it the way it is? How? Answering these questions also gives context to the Money In-Out Diagram (above, near the top).

Begin with Sept 2009, the day when one Seet Li Lin, another banker-philistine, adolescent in his ways of thinking, and one of Low Taek Jho’s minions in Singapore, ex-Wharton, suddenly grew excited at a thought. “The earth moved beneath my feet“, he wrote in an email to a friend, another tree dweller who came down in an Armani suit. “Can you feel it?”

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2. Stages of a Scam

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  • Stage 1: 2009-12. The Saudis. Seed Money. MYR 5bn. USD 3bn. The beginning of offshore accounts.

Main players: 1MDB-PetroSaudi JV, PetroSaudi Int’l (PSI) Cayman, Good Star, Jho Low, Tarek Obaid, Prince Turki, Brazen Sky, Bridge Partners Cayman, BSI Bank Singapore, SPC fund units. (To see why, at the onset, 1MDB was already resembling a Ponzi racket go here.)

All of Paradise’s hopes had hung on this opening bid: the creation of 1MDB-PetroSaudi JV, drafted not in some Arabian desert or tropical jungle palaces built by Indonesian labor but on emails, faxes, A4 photocopy papers, and on laptops, by the Wharton-banker types resident inside distant hotel rooms from where, at the end of their long, lonely days, they could, either to celebrate or to ‘unwind’, order champagne and girls. “Never miss a chance to have sex and appear on TV,” says Gore Vidal, the American novelist (The City and The Pillar) but, really, he’s just an essayist.

Days later, that idea, even before it had a chance to grow roots, had turned into a sound and light TV show in KL on Sept 2009, Najib Razak leading. Portrayed as a government-to-government endeavor, Malaysia would put in USD 1billion cash for starters. The Saudis, represented by Tarek Obaid, paid in kind, a strange arrangement because if Malaysia had flipped it around, we would have told Tarek we, too, have USD 1.5bn worth of oil reserves underneath Najib’s bed. Yet, Najib accepted Tarek’s word about the Argentinian and Turkmenistan fields. These were made up but he asked no questions then signed.

A few days later the earth shook, said Seet who ran Good Star for Jho Low. And Good Star, in case you are confused, is the name of a company registered in Hong Kong. It isn’t a star in Heaven.

The cause of the Seet’s quake excitement was USD 700million (MYR 2.3bn) of the promised USD 1bn wired to PSI, newly registered in the Cayman island. All the money had come from USD 1.5bn which 1MDB had, in turn, borrowed from the religious types at AmBank, hence called Islamic bonds. People like Seet (that’s the boy surname, not Lin) call it ‘seed money’ though. Thus, from God is the seed of life.

Over the next few weeks, another USD 300mn was wired through, after that even more. Why more? Loans. All in USD 2bn (MYR 6.5bn). From Cayman the money disappeared into various other personal and corporate accounts, including Jho Low’s Good Star but all unrelated to PSI and not especially the JV which, strangely, has only a shell existence registered not in Kuching or Medina but yet another tiny island, the British Virgin Islands or BVI.

Those are facts not contested but reaffirmed in between the lines in 1MDB yearly balance sheets and became the stuff of reporting with money trail diagrams, etc, in the Wall Street Journal and The Edge (our last, suicide report, the paper said). There was more though, bigger even than they had yet to pick up.

What’s contested, six years later, are (a) whereabouts of the seed money and loans, and (b) what happened to them because, by which time, the JV had ceased to exist with nothing to show, not even a napkin, coffee cup nor a promotional calendar embossed with its name.

Enter Arul Kanda. Not to worry, he begins in his usual confident manner. All our monies are safe: I have seen — and get this right — documents which he equates to cash and said so, like he had actually held the money in his hands. If, on the other hand, he were to show the document — that is, paper work — it would tell of money passed from company to company (such as Brazen Sky, Bridge Partners, Bridge Global Fund, Good Star) for no good, profitable reason. Most of these companies were created overnight.

When the passing around finally stopped, the money had turned into ‘fund units’ lodged in a Cayman island account. Arul further said, pointing to 1MDB’s financial accounts, that he has since gotten back half of the money — 1.1bn in cash. This was years after its first disappearance. But, here, was the other catch: money had been spent. The remaining half, 1.2bn would turn up, also years later, in the Singapore branch of a Swiss private bank named BSI.

With billions afloat, all borrowed money, invested in nothing, with no final terminal station, it is easy to see why the money should vanish, going from place to place, bank to bank, persons to persons, like a boy lost and wandering the streets, not finding his home. That legacy is on display today in the papers, clear evidence of a scam unraveling from a seed lent on holy principles:

  • (a) in Singapore criminal charges were brought against two Singaporeans (Yeo Jiawei, ex-BSI, and Kelvin Ang Wee Keng), both backroom dealing boys accused of illicitly moving money; and,
  • (b) Bank Negara’s ‘administrative fine‘ on 1MDB for exporting ringgit in 2009, 2010, 2011, totaling USD1.83bn, without reliable documentation and for refusing to return the money to Malaysia demanded of it. In other words, by lying.

The PetroSaudi-Good Star, seed money case was more ominous than it was sinister. Ominous because, rather than learn a lesson from that failure, the case was actually copied and its method of transfer was extended three years later on IPIC of the United Arab Emirates. There would be even more dodgy companies, more players involved, Americans too, and there was especially more money involved, of which the seed money played a part.

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stage1

Stage 1: Fraud or Fritter (Click on image to enlarge.)

Modus Operandi: Money In, Garbage Out

The test of those two cases — above and below, concerning PSI/Good Star and Aabar — to see if they are scams is fairly straightforward: Do the monies return to Malaysia then placed into physical infrastructure or investments as intended by those joint-ventures (JV)? The answer is self-evident.

Instead, for years and years, those monies go in circles around the world, passed from companies to companies, accounts to accounts, persons to persons. The Wharton and Jho Low types call this circularity ‘strategic investment’; 1MDB people ‘high-impact’. LSE’s Arul Kanda labels those IPIC deals not money recycling, not loans, not even debts but ‘Options’ and ‘business transactions’. Investigators would like to call them money laundering.

Has the LSE met Wharton? Don Quixote’s answer: ‘There is no record of such contact.’

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stage2

Stage 2: Fraud or Fritter? (Click on image to enlarge.)

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3. God’s Deal to End All Deals

More seed money, above and below.

Khadem signs Aabar's purchase of RHB bank share

The Janitor Among Us

Everyone knew each other, of course, those who gave and those who took; the wheelers and the dealers; those who sold, those who bought; those on thrones, those idling in janitor rooms.

And Arul Kanda wasn’t simply plucked from the Arabian desert then deposited in KL to provide national service, a selfless rescue of 1MDB. Aabar and its men — IPIC MD and Aabar chairman Khadem al Qubassi  (above, second right) and Aabar CEO and Falcon Bank chairman Badawy al Husseiny (seated beside in tie) — weren’t strangers to Malaysia because of some shared vision to build a struggling country, paving KL streets with packs of gold delivered on camel backs. Above, is Najib in a 2011 ceremony to mark Aabar’s purchase of RHB shares. Abu Dhabi Commercial Bank, the other party in the buying, was Arul’s old employer.

None of them were prepared for their Fate, five, six years later: All the seated would go kaput, the fruit of their work. Those standing are still standing, of course. But karma is still a bitch; it always come back to bite you.

Below are the Arabs in Malaysia again, that time 2013, UAE’s IPIC making deals with 1MDB that they told the world would help make us rich. It was, for starters, worth MYR18 billion. At the same time, Goldman Sachs was readying USD 3.5bn (MYR 11.5bn) for loan to Malaysia with the UAE as co-guarantor. Not a sen of that money showed up ashore although that same month, March, the equal of 20 percent of the US loan money landed in Najib’s personal KL account. The remittance bank of that money: Badawy’s Falcon. 20% eh? Is that standard rate now?

Cast of characters in front of Najib and a UAE prince (‘a’ because there are many; more princes than there are kingdoms to rule): 1MDB CEO Shahrol Halmi, 1MDB Chairman Lodin Wok Kamaruddin, Khadem of IPIC/Aabar and Badawy of Aabar/ Falcon Bank.  They knew Jho Low, of course, who, using that as credentials went around HK telling anyone who would listen, private and investment bankers in particular, his connections, with great historical significance, went all the way to camel traders and the Great Silk route. Now they are transformed, of course. When in April this year IPIC told London that Aabar BVI as opposed to Aabar UAE wasn’t theirs and, simultaneously, threatened to break their deals, Arul bitched to The Edge about Khadem and Badawy: “What? Not theirs? I hadn’t been dealing with janitors you know.

No, you hadn’t, Arul. You got it the wrong way around. They were dealing with a janitor.

Posing at the photo shoot to promote the “RM18 billion deal” three weeks before parliament was dissolved, were the Malaysian Prime Minister Najib Razak, the CEO of 1MDB (Shahrol Halmi), the Chairman of 1MDB (Lodin Wok Kamaruddin), the Chairman of Falcon Bank and CEO of Aabar (Mohamed Badawy al-Husseiny) as well the Chairman of Aabar (Khaddem Al Qubassi) who has been closely linked to numerous deals with 1MDB and to the controversial business friend of the Prime Minister, Jho Low

  • Stage 2: 2012-14. The Emiratis. The Americans join in. USD 6.5bn bond loans, USD7bn. Two Aabars & Two Arabs. Borrowings rise from MYR 6bn (Mar 2011) to MYR 42 bn (Mar 2014).

Main players: Abu Dhabi Malaysia Investment Corp (ADMIC), IPIC, Goldman Sachs, Blackstone, Najib Razak Ambank accounts, USD 6.5bn (MYR 21bn) bond, Aabar UAE vs Aabar BVI, Khadem al Qubaisi and Badawy al Husseiny, 1MDB Global Investment Ltd, Tun Razak Exchange, Bandar Malaysia, Farlim land Penang, Edra….

In 2010 when 1MDB sought to unwind its joint venture (JV) with PetroSaudi (PSI) it produced yet another deal latched to an Islamic financial term known as ‘Murabaha’. In opaque language, the Murabaha Notes demanded that 1MDB pay the JV USD 2bn, the repayment of which was guaranteed by PSI with its shares. Yet PSI is as good as broke, a shell company to all intents and purpose. Thus, God gets invoked on top of a second round absurdity in which, having lost USD 1bn in 2009 to PSI, Malaysia would remit two times more money. Total, 3bn. A new scam that puts a lid on the old, and Malaysia is still a million miles away from ‘high-impact strategic investments’.

Then comes to United Arab Emirates.

Evidently hoping to reset the broken relationship between UAE and Malaysia, Najib Razak had termed the troubles between 1MDB and IPIC as a ‘contractual dispute’ and then for Arul to sort it out. Najib had slipped in that phrase when on May 4 he announced the ‘dissolution’ of 1MDB’s Board of Advisors.

Although announcing his decision in PAC’s name, Najib was being disingenuous of course. By the time of his announcement, and completed with the transfer of the remaining land-assets out of the company, 1MDB existed only in name. The dissolution and the resignation of the Board of Directors were just coffin lids. Left behind was instead a trail of waste, racketeering and fraudulent money transfers stemming from the JV, long disbanded, and then, incredulously, repeated in 2012 and in subsequent years.

Why the 1MDB-PetroSaudi JV was eventually given up for dead seems obvious. But, more ominously is the possibility that the racketeers at 1MDB had a bigger fish to fry. Post JV, the deals with the Emirates would bring in far more US banknotes, six times more, seven times even. So impatient were they to see the money come through, Goldman Sachs was told to hurry up to bring it in, cramming into 10 months USD 1.75bn in May 2012, 1.75bn five months later, then 3bn in March 2013 after that. Total USD 6.5bn or about 21bn ringgit.

Ten out of ten Third World governments couldn’t get half that sum of money in three times the length of time.

What was the hurry? It wasn’t as if the Tun Razak land or Bandar Malaysia will turn into desert the next day. Or that Tanjong and Powertek or that the IPPs face foreclosure. At that speed of delivery, Malaysia paid heavily with high fees and commissions so that in net proceeds, before paying even the high interest, before even seeing the money, it had already lost MYR 2bn — the snap of a finger.

There was another condition to the Goldman-arranged deal: nobody wants to see the money in KL. Borrow outside, stay outside although, ostensibly, it was to fund domestic investments. There was even more Arulian language in the Term Sheet (actually a legal document specifying terms of loan): ‘working capital’ which is of course strange considering that 1MDB has no factory nor hotels, not even a Petaling Street shop. Its only work has been to borrow money, one every four months for six straight years, 26 total between 2009 and 2015.

1MDB’s people had learned two lessons from Stage One.

  • (a) Lesson One: More important than who you bank with, it is where. In KL, there are forms to fill up, money changers to contend with. But to keep USD 6.5bn out of Malaysia? Where? All over again, as it did face in 2009, is the situation of boy lost and wandering the streets, finding no home. The destination place for the USD 6.5bn wasn’t going to be Singapore, the final stop in 1MDB’s seed money: Been there, done it, so don’t go back. Thus, instead of Singapore, the monies from the IPIC/Aabar deals visited Switzerland, Luxembourg and the US. And this is not because persons like Khadem and Badawy don’t agree with the methods of Chinese operators like Jho Low. Rather, those places were simply their old tramping grounds. More to the point, those banks can handle gargantuan sums without finding their hands quivering. If it were UOB or DBS, the police gets a phone call.
  • (b) Lesson Two: Make money abroad, stay abroad. At home too many nosy people, with gorilla names like Zeti, look over your shoulders, asking embarrassing questions. Outside, people know when to mind their own business. Besides, over there, the rich ooze from the streets of Zurich and New York (Not true? Ask to go shopping with Rosmah.) At the time, oil was selling at USD 70 and 80 a barrel, so much money coming in that Shell didn’t know where to keep the cash except to distribute it: engineers would get a bonus of 13 x 1 month salary. Yes, just like that. So, what’s one more Arab or a Chinaman dropping a 100 million here, there and inside Coutts, which most Malaysians wouldn’t know exist before they had heard of 1MDB.

All that is to explain why local banks are deeply unpopular to raise US currency and why 1MDB’s entire foreign debt — two of every three ringgit borrowed — relied on a name like Goldman Sachs, a readily recognizable name, with banking reach in every western city. Wire money in the morning, get money afternoon, latest next morning.

Goldman’s ability to cram into 1MDB so much dollars into 10 months is a feat no ordinary Third World government could make an American bank do for you unless (a) your country’s reputation is good, with triple A Moody type ranking, and (b) you’d pay for it. 1MDB satisfied both conditions (but this is now gone kaput).

‘Connections’ is the another condition to get all the money. Three groups of people were into it: Arabs, Americans and, in between, middle men whose business cards name them as ‘finance consultant’, ‘fund manager’, ‘private banker’, ‘relationship executive’, the Wharton types, people you will meet in banking hall cocktails, people feted — literally — for their connections like Low, Singapore’s Seet and Yak Yew Chee, and at the top of the pack the like of Tim Leisnner and Roger Ng, all the ‘big’ names found on Linked-In.

The Arabs came in the persons of Khadem al Qubaisi and Badawy al Husseiny, respectively the top men at IPIC and Aabar Abu Dhabi, the same town from which Arul Kanda came.

With all that in place, another JV-show was trolled out for display in 2013, three years after the Saudi debacle. Again in attendance was Najib, with a Saudi prince replaced by one from the United Arab Emirates, one Sheikh Mohamed Zayed al-Nahyan.

This round has to be IPIC, a UAE-owned investment group listed in the London Stock Exchange. It couldn’t be another dodgy PetroSaudi stand-in named Tarek. The reason is this: if Goldman was going to bring in 3.5bn for Malaysia from the rest of the world, it wanted a solid, reliable guarantor and IPIC was it.

Why the Malaysian government resisted acting as guarantor became known only later. In May 2013, five months after the 3.5bn USD bond business was settled, 1MDB raised a third tranche of bonds, cash USD 3bn. That was with a government ‘Letter of Support’. In ringgit terms, at the exchange rate then, the grand total was 21.5bn. In one swipe, Goldman Sachs pulled in for 1MDB more than all monies pooled together from nearly every Malaysian financial institution spread over four years between 2009 and 2013.

In the international fund market, this is like moving the earth, especially for a next to nothing company. (BTW, some Japanese investor politely turned down Goldman’s offer to subscribe. Looking back today, shake his hand and say, Lucky you, bastard.)

This kind of money, because there is a lot of spin-offs, even if it’s a drop, is mouth watering-stuff for investment and private bankers (BSI) and fund managers and the like of Jho Low and yet he appeared absent. Was he involved? Most probably but in tiny little ways without promises of anything, not even a girl. The truth is, and given these are big USD deals, this was out of his league; Low being reduced to watching from the curb, running errands and fetching the coffee. Small fish in an ocean.

jho low ipic 2013With UAE officials in KL for the IPIC-1MDB show in 2013, Jho Low tags along, trailing behind but still around after the PetroSaudi debacle three years earlier. Jumping from a camel back to a desert land cruiser: Eh Joe? 走狗!

*

Pertinent to the question, is whether the IPIC people (Khadem and Badawy in particular) knew about the problems with the Saudis — but, they would have to know — and, if so, what were their considerations?

Identical to the PetroSaudi JV modus operandi, Khadem and Badawy would later do a Jho on 1MDB (alone or in concert with, as Arul terms it, ‘internal cooperation’ is another thing altogether): bogus company, hidden Caribbean island accounts, money remittances here and there, Options, and one deal to end all deals. Recall that US dollars never entered Malaysia, not a dime, excluding ‘donations’, ‘gifts’ and ‘political funds’ and ‘anti-terrorism’ capital cost. In total, or minimally, USD 5bn had been wired into the parking-lot account of Aabar BVI.

Ignore, for the moment, the shadiness in the wire transfer and consider the 1MDB-IPIC deal itself. Briefly, it states this: IPIC stands as (1) guarantor to redeem the entire USD 3.5bn worth of bonds, (2) pay its half-yearly interest, USD 100mn a year, and (3) ‘forgive’ (that is the actual word) some money, unstated, 1MDB owes it. In return, 1MDB would let IPIC take 3.5bn plus 49 percent of Edra that the bond money was meant to buy, starting with Tanjong.

Is this a good deal? The USD bonds cancel out; ostensibly, 1MDB gave nothing, got nothing. What’s left is Edra which sold for around MYR 10bn, meaning that Edra to IPIC was worth 5bn. But is this the point in raising the US money in the first place? And because the answer is, ‘No’, then why go round in circles with other people’s money producing the disastrous result that Arul now complains of: Malaysia was scammed.

This attempt at fraud — passing off as real something that is useless — repeats in its entirety the creation of the 1MDB-PetroSaudi JV wherein the Saudis declared on paper, and Najib accepted, that there are oil assets in Argentina and the Caspian. Today, the JV disbanded and monies gone, 1MDB is sitting on nothing that PetroSaudi had declared — on paper — it owns. Like, the cash ‘units’ sitting in Singapore.

The IPIC deal possess the same quality and absurdity: sitting on assets that you can’t possibly own if it isn’t bought with your money and, before which, to go through the rigmarole of passing around borrowed money in the pretense that 1MDB is doing useful work — making investments for the nation.

More difficult to stomach than being scammed by Arab heads in towels is this possible incredulity: Was Najib then a party to the Swindle? If not, can he be that stupid, not once but three times over, 2009, 2012 and 2015.

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1MDB-IPIC May 2015

Image 5: 1MDB-IPIC debt settlement deal, 2015 (To read, click on image.)

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https://lh3.googleusercontent.com/zGOGJ7KGvdMZdF9QQqIcVK9N1eM94FpRL3xZfIW0golgEnk_C9TM7URXikOV_uBW026ewDk8f_E=w1366-h768-no

Image 6: Declared missing since last year, USD 2.1bn (about MYR 8bn). Above is snapshot of the PAC report. The money, meant for IPIC, had gone to the wrong Aabar in BVI instead of London and, therefore, unverifiable. Strangely, for almost a year, Arul Kanda showed little concern, bragging, even today, about the glories of his debt reduction rationalization being ‘on track, with surplus cash to boot’.  (For pointing out the PAC part, 感谢 Khairil Yusof)

But, in pointing the finger elsewhere — 1MDB Board of Directors, its chairman and its CEO, PSI, Aabar and those Arabs — the PAC report was more effective than the Attorney General and those Arab brothers and princes to clear Najib of any responsibility in the sordid business. (See side story near the top, the ‘Failure of the PAC’)

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  • Stage 3: 2015-to present. Janitor arrives. Cleaning starts. Walls repainted. 60 billion gets 22 billion.

Main players: Arul Kanda, 1MDB-IPIC-Aabar PJS-Minister of Finance, Aabar BVI, BSI Singapore & Switzerland, Other Investigators Luxembourg, USA, Hong Kong, WSJ, sacking of al Husseiny and others in Malaysia

The end of Arul’s janitorial task wasn’t merely a survey into the garbage and the grit accumulated in 1MDB. That an organization set up for no intent other than to pillage, filth being left behind is inevitable. Only the scale and the depth of the money involved and looted are in question — the globalization of a fraud.

Not in question, too, is how the thing is pulled off: the mechanics and the institutions available for the use are not new ones created solely for the purpose of siphoning off a great part of 60 billion. No, they are there already.

What’s startling is the routine-ness in the process with its bureaucratic and rigid quality: write down the plan, discuss, fix dates, book a hall, execute, prepare those platitudinous Press statements, photographs, shake hands then adjourn for the results. Every part does its part. There is even the media to help spread the lie. No bank manager stops to refuse a suspicious transaction: it isn’t his money after all. No lawyer refuses to help draft those papers and those deals. This lying is so routine and bureaucratic that when, eventually, the money started flowing, the process gathers pace on its own and assumes a life. Companies are registered, bank accounts opened, power of attorneys are vested and so on.

All of which suggests that no great thinking is necessary, no great planning. Jho Low is just a boy, and not the marvel of a great Fixer, he doing his schoolboy pranks and nobody notices because they are so ordinary.

In this mindlessness, all the parts of the system functioned very well: if not, how then to explain that 60 billion can be moved around so readily? And, if not for some whistle blower in 2015, life would go on as if nothing happened. Arul didn’t come into the picture after the WSJ report. He arrived at 1MDB six months before. This can only mean that his janitorial task was well under way, speeded up only because of the worldwide exposure.

It meant that there was a plan to wipe clean the traces of the scam. Better yet, remove its origins, the thing that permitted it, the thing that attracts the world and, therefore, the scams to itself: 1MDB. For this reason alone, the lying has to continue — until, at least, there is nothing left to lie about. Arul works himself to the death in his role; he being the end of the process reversed to its starting point. Nothing, no 1MDB, no sovereign, no wealth, no fund, no nothing. The lying would reach its demise. Arul is rationalized to Death.

Task accomplished, Najib owes it to Arul. To a fraudulent system, country, and government is added one more character, contented to be included into part of a system. One more spoke in the wheel rolling off into Malaysia’s oblivion. Of course, there were others before Arul — Rahman Dahlan, Apandi Ali, Azalina Othman and so on. In them one can see what Najib means when he declared that loyalty strengthens his government, the system.

Another question in 1MDB’s legacy is this: how much is the government exposed in the debts? Mahathir Mohamad thinks about this potential outcome: he thinks of the lessons of Greece and Iceland, Latin America before that. By any healthy corporate or financial standard, 1MDB would have gone under years ago. If it did, so much the better for Najib; no more garbage to take out. Governments can turn bankrupt, true. But Greece and Iceland are still on the map if anyone care to look.

So, why bother with Najib’s government and whether it lives or dies. Aren’t there more important things to worry? My rent is due next week. Instead, 60 billion, six years, 10 billion a year, and all so easy. A walk in the park for him: Najib going to the bank daily, without fail, absolutely. He enters the front door and walks out with 27.5 million, cash, every day for six years and all that in a country that averages a family income of 3,000 a month, 100 a day.

After which, assisted by Arul Kanda Kandasamy, he constructs a story of how he could just walk away with 60 billion, 27.5 million a day, in which no one seemed perturbed, not he especially. For that is exactly what Jho Low had told Euromoney: he didn’t steal anything, he was just the middle man. Shahrol Halmi was under orders and so, too, the AmBank manager who’d say he was forced to remit the money in spite of the suspicious circumstances. As for Najib his line of defense would be identical: He isn’t responsible for anything. “As for the money in my account,” he would say, “I didn’t put it there. It had nothing to do with me. What can I do if somebody gives it to me? But for the glory of the Party I would accept it.”

Such a man, mindless, unthinking, assuming no responsibility and unwilling to do so, and so ordinarily pathetic and bureaucratic; he is dangerous — for the banality of corruption. History has been unkind to this country but with Najib even Fate is powerless to intervene. So, when the denouement comes, it would be too late because nobody is responsible.

***


Endnote

One tabulation, appearing in Malaysiakini some time ago, gives this breakdown into the varied sources of money available for siphoning from 1MDB’s dealings, excluding the RM4 billion KWAP (Retirement Fund Inc.) loan for SRC International:

Group 1: USD Out-payments

  • US$1.83 billion, payments to 1MDB-PetroSaudi International joint venture, 2009-2012;

Group 2, USD. One In-payment. Rest, Out-payments

  • US$6.5 billion, raised in USD bonds by Goldman Sachs, 2012-13;
  • US$2.7 billion, payments to Abu Dhabi Malaysia Investment Company (ADMIC), 2013;
  • US$850 million, payments to Aabar Abu Dhabi, 2014?;
  • US$2.33 billion, payments to Aabar BVI, 2013-15;

Group 3: Ringgit currency, domestic. Out-payments

  • RM18 billion, payments for independent power producers (RM18 billion), 2012-2013;
  • RM1.7 billion, payments for land, 2013-2014?

Sub-Total: Offshore component USD 14.2bn (MYR 47bn)

Sub-Total: Onshore component MYR 19.7bn

Grand total, available for looting: MYR 67bn

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Other Side of Paradise

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Anna, above, imagined portrait. Jian below. “I am lonely, yet not everybody will do. I don’t know why, some people fill the gaps, others emphasize my loneliness.” — Anais Nin

mug

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With the first print of 3,000 copies, This Side of Paradise was sold out in three days. F. Scott Fitzgerald had written it, a slim 80 pages of typescript, in 1919 while still at Princeton, mostly, it seems, in the university library. Word then was that he wanted it to impress his love Zelda Sayre who he later married.

‘”I don’t want to repeat my innocence. I want the pleasure of losing it again,”‘ is a line in the book which is telling about its story and theme. Warped and perverted by greed and self-seeking, Love finds hard, nay, impossible, to preserve its first encounter and its purity and its innocence.

Another line: ‘”You’re a slave, a bound helpless slave to one thing in this world, your imagination.”‘

It was by chance, we, Jian and I, had stumbled onto a Chinese translation of This Side of Paradise at the city’s Xinhua Books. Next to it, beside the rack, on the table were stacks of Tolstoy’s Anna Karenina and Flaubert’s Madame Bovary, both in hardback, each selling for under 30 ringgit. Minutes past, then more. When at last I heard her call from the end of the aisle, she had both books lifted aloft her flaming pink-dyed hair: “Which one shall I take?”

I went up. “Which do you like?”

“I don’t know…. Maybe Anna,” she said and began re-telling (to me) some of the scenes with the horses and carriages and Anna’s clothes and her make-up and a part of her encounter with Alexey Vronskiy. This might seem unusual because Russia, to a Malaysian, is far more remote than the Paris of Flaubert though both novels were set the same time, the 19th Century. Against the standards of Anna and Bovary, This Side of Paradise would be contemporary, Anglophone and universities, youth and love. But, this is China where people speak more often about Russia and the Red Square than to have heard of Buckingham or New York.

“Why don’t you take both?” I answered.

Next morning, I woke up to find her propped up on pillows reading Anna. “We won’t have breakfast together,” she said. “Do you mind?” She put the book faced down, turned to me, stroked my hair, smiled, her tone sweeter than sweet that beat inside my chest the whole day. “On your way out, why don’t you have some noodles downstairs?” I did. It was Fall. The rain started and there was no cab for a long while. Waiting, I read Paradise and thought at the same time that one day, when she is ready, I will take her to paradise America where we would be happier than happy.

Anais Nin:

We travel, some of us forever, to seek other places, other lives, other souls.

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We never see things as they are, we see things as we are.

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Carolina in my mind

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The Chinese swear before their forefathers, not tyrants.

總統身份簽署第一份公文

Tsai Ing-wen signs in as Taiwan president, 2016 May 20

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On 蔡英文 Tsai Ing-wen

 

A Wiki page extract:

Tsai was born in Zhongshan District, Taipei, Taiwan, on 31 October 1956, the youngest of nine children in her family. Her given name, Ing-wen (英文), literally translated as “heroic, educated”. She studied law at the behest of her father. After graduating at the College of Law, National Taiwan University, in 1978, Tsai obtained a Master of Laws at Cornell University Law School in 1980 and then a Ph.D. in law at the London School of Economics (1984). Upon her return to Taiwan, she taught law at School of Law at Soochow University and National Chengchi University, both in Taipei.

 

Invictus

I’m the master of my fate

I’m the captain of my soul

*

Dear Mr Anwar:

It is not I but your party colleagues who should respond to your letter you wrote to them and which has just been circulated. Writing to you in this way feels, worse than intrusion, being presumptuous. Because you speak in private to party colleagues, reminding them their purpose, one is compelled to ask, how and to whom should this letter be addressed? Is it sufficient to say, for I?

But, would all that be necessary if your letter is in doubt? They question if it is from your written hand. They question its authenticity. They question your motive and then say you were simply ‘whining’. One say you write badly, your prose convoluted. And this from a man who doesn’t even know where to put his commas nor pause in his lines to hold his tongue, much less string together a proper sentence (re: postscript). Yet another say it is a ‘tirade out of boredom‘. Boredom? In a prison?

Indeed, such is the state of this nation and the condition of our souls: trust no one. Beget nothing and nothing is brought forth. Our lives tire of our neighbors, our neighbors are cynical toward each other, friends betray, even brothers. We can’t even read a letter without suspicion and without doubting. After which, when doubts find no confirmation, we despise the letter in the way one despises cops because their motives are questionable.

When we despise the cops, we wish them dead because it makes no difference to have them around. This dilemma is worse for the thief. And it isn’t because a cop would be in the way of a burglary, but because one must steal even more to have enough of the loot for distribution. A man might take 20 percent because below they are each asking for 10, and farther down and down and down. And why not?

The State called Malaysia makes this theft into a political art form, names it the NEP, sets 30 percent for redistribution after skimming off from one part of the system. The same thinking goes through Pol Pot’s Cambodia, in Stalin’s Russia, and Mao’s China and communist Vietnam: the bourgeoisie pay more for cars, houses; visiting foreigners even more, for a room, a train ticket, food as well. The Chinese were made the bourgeoisie of Malaysia, the foreigners of this land. Once classes of people emerge from these classifications, one class must therefore represent the better specie, more deserving, representing the greater good. In this greater good are laid the foundations of our morality.

How then is one to question Najib Razak for taking 20 percent if his theft is for a greater good, the Party, because he’d say to you, my father got it for you, every Melayu, at 30 percent.

When theft becomes permissible by its internal logic, it ceases to be a moral crime and becomes a technicality, a legal crime. When morality ceases to be crime, it becomes a social duty, in Malaysia a political obligation. This is Najib’s problem: the illegality of a theft threatens his duty. Certainly you know this dilemma well enough: you were there. What was the going rate when you were with Mahathir Mohamad? Thirty percent was it? For this company and that cache of stock; licenses a 100 percent?

Remember Raskolnikov in Dostoyevsky‘s Crime and Punishment? Raskolnikov confronts the same dilemma after reasoning that the killing of a pawnbroker is hardly a moral crime but a social duty, she being the old, greedy pawnbroker that she is. Today, that reasoning is extended to the whole nation, perverse as it might seem: For murder to be permissible then a new law is most desirous. But no new law is possible without breaking the old.

In Raksolnikov, a new law appears implausible — that is, by chance of it being enacted. But were it to get pass a man’s conscience then, clearly, no obstacle stands in the way. Imagine all the legal possibilities if murder could be sanctioned by conscience which, if nothing else, is but the conduit of our moralities.

If Mahathir, in denouncing the Jews and the Chinese, was the petty Raskolnikov of his age, Najib Razak is neo-Raskolnikov of our times: Altantuya is killed for no obvious cause nor reason. After that new laws are introduced in defiance of the old: yellow is forbidden, then cartoons. Travel in specific cases shall require government clearance, an act which, by transgressing the old, enacts the possibility we are at the cusp of an absurdity witnessed in Wahhabism and in ISIS rule wherein the victim of a rape is guilty of the immorality of fornication. The legal crime is inverted, becoming in itself an immorality with which your politician ‘friends’ now seek to protect us from. Thereafter it is a breeze to do away with those crimes. This is the point in hudud, the inversion of our values in the same way theft is overturned by its social and political obligations.

At the time of your letter, Mahathir also wrote. Have you read it? Like yours, it was written also to party colleagues, speaking the same entreaties: see the machinations of treachery for what they are, throw out the yoke of your chains, lift the shroud of darkness, stay on the side of righteousness. One doesn’t doubt his sincerity. It’s only when a man’s convictions are false, they are worse for their sincerity. W.B. Yeats whom you have cited was true in many circumstances but false in all:

The best lack of all conviction,

whilst the worse

are full of passionate intensity

The Machivellians – full of passionate intensity – ought to be the least of this country’s concerns. It is the Best who, being worse than lacking conviction, sees no purpose in their convictions. We have become a nation that brings out the worse in ourselves. We subject our convictions to passions that, in their turn, makes worse the bad of our circumstance.

In your own letter you speak of these conditions in the abstract, a malady of the system as it were, with the law, with justice and equality. If these are abstracts of morality manifested in the system then, surely, the fault lay not in the manifestations but in the morality that fill our lives. Law, justice and equality are not options to live; they make for a life; they are the Morals.

Remind yourself this: You are imprisoned today for the triumph of one man’s morality, another man’s law, over your own. If this be true, we deign to ask ourselves: how then shall we live?

Saul Bellow tells us that alone to ourselves, alone in the cell, being good is impossible. There is nobody to be good to. The Machivellians among your friends and colleagues who, after they have sequestered our morality, create new ones that become the standard of our times. Suddenly, we find ourselves alone; there’s no one to be good to because it isn’t recognized. Malaysia becomes our prison while, inside it, the new morality acquires different definitions and different names. Loyalty today serves another purpose; theft can be useful; conviction becomes rights. Thirty percent is a right. Should a man want twenty, not for himself but for the greater good, the Party, then surely there can be no fault in the taking but only in the giving.

“I have taken nothing for personal gain,” says Najib. I have only given. The giving is the new standard in the morality of theft. In this redefinition, many people suddenly discover they are on the wrong side of the new moral law. Once your attempt to redefine our morality fail, you shall find yourself still on the side of the old order. You, Anwar, go to jail. Desist, therefore, from tinkering with the lives of others.

In inverting all our moralities, Najib succeeds beyond all our fears. We don’t know what to make of it. The old has this perniciousness (from which you suffer) while the new is insidious.

Have you read what Ambiga said? “[Support for PAS] is a tactical move to make Barisan lose. It is not to make PAS win. … There is a difference.” To win is yet a new morality, a raison d’etre. And this is from a person who once extols the virtues of probity and clear thinking and of fidelity to rectitude. Could anyone, thus, fault Najib should, on his denouement, say there is no corruption, but that the theft is social duty to serve a greater cause — the Party winning.

Truth isn’t the only thing that suffers in this new moral order. Our lives deteriorate alongside it; we grow in our uncertainties, our suspicions and our cynicism. Our ethical values upside down, the majority is the minority needing material assistance; evil finds shelter in God; theft is gift; to win, first lose; the Monster is the victim; to give offense first pretend insult; if you are not with us, you must be against us.

Long ago, we were warned that truth is two-face. We didn’t heed that warning. Now, we are trapped like rats. How did we come to this?

You can see, therefore, how, in his letter Mahathir whistles in the wind and shall find no ears to listen. In your letter, ears listen without taking it to heart.

This reply, I’m sorry to say, offers no comfort. But that’s all there’s to it. I believe this is how one begins: looking down at the feet that takes the first step in a thousand miles. After which, it is self evident where we should go. We didn’t look where we were going.

It’s also just as well I write to you, not your party colleagues and friends. Speak to philistines and you have to expect that nothing shall be taken to heart. To them you are just whining and rambling. I shall leave you now with Rudyard Kipling:

If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;

If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,

Yours truly,

rihaku

*

P/S: Have you read of this Syed Akbar Ali?  He has a bibliography that brags about his life, going from businessman to author and on and on and on. It reads like a recipe — a long one, too — for the making of an idiot. He describes your letter as ‘long and rambling’, and criticizes it for breaking his fatwa on Rules of Writing. Rule No. 1, he says, Be understood. (There is no mention of Rule No. 2 nor 3.)

The Syeds should be served with only kindergarten rhymes (‘Mary had a little lamb’), all short and easily understood. Otherwise it would be too much, considering that they suffer from an illness called, attention deficit disorder.

To say your letter reads convoluted puts the language of the Quran in Syed’s categorization. Be understood?  Yes, of course, even the snake oil salesman will make sure of that: sit idiots on the curb then begin with the music of an Indian (or mamak) pipe piper. And so it is: in the snake oil Syeds of the world are the beginnings of a fraudulent country. What is one more Bugis man for their ranks?

You, Anwar, now know what you are up against to reform this country? You’d have first teach its people to read and write. And this starts not with children, for that’s the easy part, but with the Syeds of Malaysia, the Ahis and the Attans, the Petras and Kamarudins. Imagine the task ahead…. And make it short the next time. They can’t take it.

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Love is so short, forgetting is so long

— Pablo Neruda (1904-1973)

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For Jian

From Twenty Love Poems by Pablo Neruda

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Tonight I can write the saddest lines.
Write, for example, ‘The night is starry
and the stars are blue and shiver in the distance.’

The night wind revolves in the sky and sings.
Tonight I can write the saddest lines.
I loved her, and sometimes she loved me too.

Through nights like this one I held her in my arms.
I kissed her again and again under the endless sky.
She loved me, sometimes I loved her too.

How could one not have loved her great still eyes.
Tonight I can write the saddest lines.
To think that I do not have her. To feel that I have lost her.

To hear the immense night, still more immense without her.
And the verse falls to the soul like dew to the pasture.
What does it matter that my love could not keep her.

The night is starry and she is not with me.
This is all. In the distance someone is singing. In the distance.
My soul is not satisfied that it has lost her.

My sight tries to find her as though to bring her closer.
My heart looks for her, and she is not with me.

The same night whitening the same trees.
We, of that time, are no longer the same.

I no longer love her, that’s certain, but how I loved her.
My voice tries to find the wind to touch her hearing.

Another’s. She will be another’s. As she was before my kisses.
Her voice, her bright body. Her infinite eyes.

I no longer love her, that’s certain, but maybe I love her.
Love is so short, forgetting is so long.

Because through nights like this one I held her in my arms
my soul is not satisfied that it has lost her.

Though this be the last pain that she makes me suffer
and these the last verses that I write for her.

 

Jadryn Loo, circa 2016

Jadryn Loo of Penang likes speaking out. Try saying this in RPK Cantonese, Fatso: sohai, haam gaa caan. Here’s a third for practice: diunei loumou. That’s true profanity, asshole. Want a translation, Hokkein lang?

pukgaai lang

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Some three or four years ago Hong Kong’s Legislative Council, the equivalent of Parliament, passed into municipal bylaws governing the use of MTR. It prohibits the use of profanities inside areas of the underground Metro system, that is, inside trains and in paid areas, places after passing the turnstiles. The penalty is a fine on the first two or three occasions and, after that, jail.

Use of the Cantonese dialect, in Hong Kong far more than the Guangdong province, is commonly littered with swear words, often both in jest and in disgust. One website list an order of 50-60 swear phrases. Outside HK (and Macau), many of those swear words and phrases are not reproducible for the reason there is no Mandarin equivalent: it won’t be understood. For example, the transliterate phrase ‘puk gaai踣街 in traditional handwriting (仆街 in simplified form) means literally, ‘fall/street’.

Elsewhere in China that phrase has no sense meaning. As someone falling onto a street, it is in the English metaphorical sense, ‘drop dead’. Which raises the question, is saying the same thing in the English — drop dead — a profanity?

Then there is the other phrase that DAP’s Hew Kuan Yaw often uses in his political campaign speeches, most recently Sarawak: in the Jyutping transliteration haam6 gaa1 caan2 咸家鏟 (the numbers denote one of eight levels in Cantonese inflections; Mandarin has only four). In its Mandarin pinyin the first syllable xian in xianjiachan is actually a surname or variously used to mean ‘salted’, ‘all at once’, ‘everybody’, even ‘stingy’. Literal meaning of the last two words: ‘family/to shovel’.

Strung together the phrase in the English has, again, no sense meaning: a family all together shoveling? In the street sense, however, it means, death to your family. Because the Chinese family is considered sacred, the phrase extends the English equivalent ‘dig your own hole’ to include the entire family burying itself. By inference, a single person’s deeds bring disaster to all.

In short, both phrases unlike, say, ‘fuck you, RPK’, have a strong moral message. The Chinese language, even when swearing, has this ethics imbued force — that actions committed by one has consequences; if actions are bad, then consequences will be dire.

Jadryn Loo makes an issue of Hew’s use of those Cantonese phrases to mean they are the equivalent of English swear words when they are not. And even if she, as a listener, insists they are profanities Hew was right at two levels: (a) their sense meaning in regards to Najib Razak is true on point of fact; that is, Najib has dug a deep hole with 1MDB, big enough to bury all Malaysia; and, (b) it is a moral expression of disgust in Malaysia’s present state of rule and affairs.

Jadryn was thinking like an Englishman and sense like one. Knowing almost nothing about Chinese linguistic culture, her sense feelings are entirely Anglophile. She may wear Chinese clothes and collect Chinese artifacts, paintings, tea sets, that sort of thing (you see them in her blog). But that’s like an Englishman collecting those things to show how urbane and cosmopolitan he is. In short, a Fake.

Malaysiakini reporters commit the same error and misconceptions, but they know shit — like Petra Kamarudin who likes so much the phrase ‘fuck you’ that he would attribute it to Hew.

The core problem people, including MCA’s Ti Lian Ker, have with Hew’s Mandarin speech is the word ‘screw’ inserted into the Chinese line that translates as ‘Let a Malay screw the Malay, the corrupt Malay.’ The English word ‘screw’ is used commonly to mean, ‘to punish’ or, in a more extreme meaning, ‘to fix up’. Why that word? There is no Chinese equivalent of ‘screw’ to deliver that force of meaning and, more crucially, it is a profoundly Malaysian word. Use it on an American, he will look back at you in bewilderment.

A second explanation, omitting the ‘screw’ word, has to do with the meaning, one Malay dealing with another Malay. This, again, is a very Malaysian thing and, also, a very Chinese ethical injunction: mind your own business. Just as in BN politics where the MCA is left to deal with Chinese-related issues and MIC to Indian, Hew expresses the same dilemma: the DAP is hand-tied to help the Malay because it is seen as a Chinese party. Hence, Hew’s solution.

Ti Lian Ker doesn’t understand his BN politics.

And when Lim Kit Siang says Hew was ‘crass’ in his language use — Let a Malay screw the Malay, the corrupt Malay — he is in effect saying Hew is very Malaysian. So, to Kit Siang, how wrong is that?

Back to Jadryn: nei pukgaai. diunei laanyueng 屌你𡳞樣.  Want a fucking translation, Hokkein dickface? Talk of dignity and morality: And you have morality like RPK has morality, betraying his own son to let rot in jail? You and RPK share the same thing in this: haam-gaa-caan 咸家鏟.

Pukgaai Loo…

*

 

Hate Mail for a Loo

Dear Jardine:

Visit Helen ‘Ah So’ Ang and you’ll see that her Malaiyoo fanboys have pledged to exterminate you — and that isn’t exaggeration — if you are simultaneously (a) Chinese and (b) a DAP member. Or at Malaysia Today, read Jadryn Loo.

We know what’s a ‘loo’. But is jadryn pronounced as jardine or without the ‘e’ and ‘r’. She is a practising lawyer, one is told in MT’s Hornbill. Could you tell in Jadryn, just looking at the photo (bottom), between a lawyer practising to be lawyer and a lawyer who is just practising, as in faking?

They say that hate mail is a byproduct of the Internet age. But these people… what do they know.

Here is the ever polite English gentleman in D.H. Lawrence in a 1915 letter to Bertrand Russell:

“I would rather have the German soldiers with their rapine and cruelty, than you with your words of goodness. It is the falsity I can’t bear. I wouldn’t care if you were six times a murderer, so long as you said to yourself, ‘I am this.’ The enemy of all mankind, you are, full of the lust of enmity. It is not the hatred of falsehood which inspires you. It is the hatred of people, of flesh and blood. It is a perverted, mental blood-lust.”

To Katherine Mansfield in 1920: “You revolt me stewing in your consumption.” To Aldous Huxley in 1928: “I have read Point Counter Point with a heart sinking through my boot soles.”

Lawrence writing hate mail was, of course, a class above the Jardines or their yellow Chinese imitations, the Jadryns. It is called literary hate art. Commoners and lawyers when they write are just trite. Here’s what Mark Twain got from an Ohioan in 1885:

Dear Sir: For Gods sake give a suffering public a rest on your labored wit.—Shoot your trash & quit it.—You are only an imitator of Artemas Ward & a sickening one at that & we are all sick of you, For Gods sake take a tumble & give U.S. a rest.

Yada, yada, yada….

William Giraldi who writes for the New Republic wonders why people ever bother to write hate mail to strangers. He has a point. A seething ego perhaps. He cites a political and cultural critic, one Steve Almond: “These outbursts, as repugnant as they can seem, often feel more authentic than the reasoned arguments we recite to those who already agree with us.”

Perhaps the yellow Jadryns are in that category: ‘practising’ lawyers with a seething ego feeling authentic. Which raises the question, what is authentic about a Jadryn in a Loo?

She considers herself a class above the like of Hew Kuan Yaw? In Jadryn’s point of view, if Hew should swear, don’t use her Queen’s English. The word ‘screw’ — which is really the thing in contention — isn’t mentioned in her own hate mail. Hew is instead cited in the Cantonese transliteration as pok kai ham ka chan (a widely used expression for disgust in Hong Kong). After which, Jadryn compares him to a “gangster” — invariably Chinese — without “basic dignity, respect and moral code of conduct of a human being”.

In short, not like a Jardine, not like Jadryn Loo, so refined, so English, so cultured, so gentlemanly — not far different from Hannah Yeoh’s worldview of the Chinese as crass, uncultured and uncivilized.

That is, Hew is not an Anglophile like Jadryn. Very likely she even hates her family name: “Don’t you dare call me a Loo. I’m not a loo!

“Moral code of conduct?” Jadryn, you say.

Well, here’s our moral code, Jadryn: In hanyu 肏你的马屄。 Go fuck your English dog, Fatso.

sohai

A yellow Jardine in a loo.

 

Paradise Lost: In 1667 the manuscript was sold for ten pounds.

*

This is the continuation of a series in capturing the lives of people in parallel and of the zealotry and the dilemmas of our times often triggered, perhaps, by different motivations. We wonder between the good and the bad; who is the decent and the honest and who really is the scumbag and thief and why even they have their defenders. Behind these dilemmas, some see God in the motivations, others see morality, yet others Nature. God has been more trouble than He is worth the bother, useful perhaps for a funeral and no more.

We don’t want to believe anymore than is necessary because we can be good without God. Evil shelters behind Him; He hampers our sense of fair judgment and the innocent are powerless when His name is invoked. At heart, we are all Spinozists and want to be so; things happen because they happen. Nature has no morality. If we made our values and pass them on we can also unmade them. We may record our judgments or our inclinations, and that’s that. We want no endorsement nor do wish for condemnation. It is fair enough if we only understand fully before we  judge.

By necessity, parts of these stories and essays are personal. The author is indebted to Jian (below), his love, sun, moon and stars. Idea for this parallel framework, the intimate and the personal side by side with the national and the public, was borrowed from J.M. Coetzee’s Diary of a Bad Year (2007). Series start here, Suicide, Revolutions & Chillies then The Golden Age of the Nihilist.

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Out of the Woods. To Paradise

The image or notion of the money-grubbing Chinese, racist and ill-mannered to boot, so dominates Malaysian consciousness that it will be a shock to Malays to find that the Chinese, China or anywhere, don’t live or think the way Petra Kamarudin (representative of Anglophile racism) pictures them and want them to believe.

As recent as the 1980s, seven in ten Chinese live in rural China, usually mountainous, often secluded homes. Water comes from the mountain stream but you’d have to go and fetch it with a pail. There is no electricity, so many families have rebuilt their houses alongside the government constructed concrete roads then hook wires onto the electricity pylons. Warmth comes from burning firewood in winter. You, too, have to go get them — up 300 meters. Nobody sobs over these inconveniences. They do something about it, and many scam their way out of those mountains.

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city girl

Above, a woman emerging from the forest approaches the city, surveying it as if a little apprehensive.

*

The many who abandon this rural life have not look back with regrets. When we first met, Jian and I, she had already been away for two years. It took another year before she would let me into her old world, lodged in the pine and cypress forests, winters washed in fog and snow and, in summers, we’d bath in the streams along the creeks and gullies — with nothing on, no sarongs, nothing.

Where the forest meet the stream, Jian stripped, threw her clothes onto a pile of rocks, and quickly waded in. The summer rain brings water down the creek more than the season before. In these parts, the morning mist still drift in from the forest and the heavens. Like a person who suddenly remembers the keys after stepping out of the gate, she turned around, stared at me and shouted: “What are you waiting for? Take off your clothes. Come quick!”

“What? Here?” I was still standing beside the pile of rocks strewn with her clothes.

“If not here, where? You want to bath with your clothes on?” she answered then sank into the water. It isn’t deep, just to the thighs. I thought I saw her shaking her head as if in disbelief.

Her answers weren’t for the question; it was meant differently. But questions mean differently here and, of course, to Jian. Only I hadn’t seen it that way before. Her normal was my abnormal; a normality not of innocence nor naivety but of a sinless-ness, without god, man nor serpents. Snakes are just food, not symbolic for behavior or thoughts or people, like the Indians. (RPK or Tan Keng Liang will think on those terms.) There are little snakes in the flooded summer rice fields, easy to fish out, take home, and throw into the pot. We collected some on the way back.

Those who believe village life as pristine and guileless aren’t just romantic after western biblical notions. They are deluded. Cities are simply villages extended. The difference being in the intensity and frequency of betrayals and, in the city, you are on your own — no family, no relatives, no school mates, no support, no bank savings, no waiting cars. Not even the government is with you; lucky if it is indifferent.

On her second day of her arrival some asshole, no different from those at 1MDB, scammed her of 500 yuan, part of the precious little she had. This happens with astonishing regularity, a 100 here, 300 there. I’m incredulous but she shrugs it off as a price of living, of being alive. Innocence is a luxury only for the dead. A year later, while we were living together, she lost 1,000 yuan — over the phone. But, the guilt is mine so that, to mollify it, to appease my incredulity, I gave her a thousand the first thing the next day before leaving for work. The pretext: our rent in advance.

She understood it differently, of course. “I understand, now, why I love you,” she smiled, still clutching the wad of notes. “Naive.”

Me naive? Me who has seen the world, and trained in one of its best universities? And that in the fine art of thinking and philosophizing and in solving problematic equations? But might it not be true: After all, humanity is not taught, it is cultivated. Which probably explains why many of the worse scums in Malaysia — the Joes, the Lows and the Razaks — had come from Oxford and Wharton. Their betrayals caused are no less painful than the man outside train stations waiting to scam adolescents arriving from the forested mountains.

miao4Jian is half Miao on her mother’s side. Their women love ornamentation; the traditional ones are typically made of silver alloy, pictured above: cuffs, hair pins, hat, bracelets, necklaces. Many of them seem naturally skilled in embroidery, and clothing is quickest and most ready to work on when in the city. This intuitive inclination towards some objective beauty, hand crafted, probably explains why Jian very quickly leaned towards modelling (as in the one below).

miao6

*

Butterflies don’t fly backwards

我的爱, 蝴蝶不飞倒退

***

Whitewashing 1MDB

by Arul Kanda Kandasamy

You see, it is like this, Arul: You go in there, clean the boots — books or boots, they are the same — wash the walls, repaint, use white, always white, it means purity, and after that we’ll call in the inspectors. What they find depends on how well you do the job. Understand?

He nodded out of habit, but it was months later before understanding reveals itself as consciousness.

Najib continued: “Don’t fail me now. Don’t mess this up. Stay cool. If you keep saying the same thing — recycling — then you can’t go wrong. Talk to the Press if you must. It’s all perception. My guru RPK taught me that. When talking, sound rational. Use Keng-Liang logic. Know what that is?”

He paused then added: “Never get angry. When you’re angry, logic fails you. Get it!

Sixteen months later:

“Honestly, I’ll tell you guys. Honestly, I didn’t sign up for this.” — Arul Kanda, April 2016, talking selfie to reporters at The Edge, who promptly bought an honest, heart-to-heart story. “Poor Arul,” thus spake Jose ‘Bollocks’ Barrocks in ‘His job is not done yet‘.

*

1MDB Whitewashed

& Post Arul

Hearing it from Arul Kanda, 1MDB is as good as finished. More recently Azalina Othman reaffirmed the genus of the same idea, leave it for dead. And to do that, they would cut the fastening lines then let that leaking old yacht named 1MDB drift off to sea. The longer it is moored onto the Malaysian government jetty, to Najib Razak in person, the greater is the hold of liability on both. Bad news attracts attention to itself.

Thus, said Lina, “there is no more issue with 1MDB.”  After the report of the Parliament’s Public Account Committee, she added, all matters concerning the company is “for it to deal with, internally”.

O! Really, Lina? ‘An internal matter’, you say. Well, here would be Low Taek Jho’s answer long before 1MDB would be turned ‘internal’:

Are you telling me the prime minister doesn’t make his own decisions? That the ministry, the minister of finance, who is the prime minister – and there are only two to three people in the finance ministry that sign off on shareholder resolutions under law – that none of them… that they just signed without evaluating it?
Joe Boy continues:
Did the people supposed to be responsible for decision-making (at 1MDB) suddenly decide to absolve all their responsibilities and then create this PR campaign with me as the focus of it? .. (W)ho is the ultimate decision-maker on 1MDB?
Then this; the clincher-confession:
There are so many other people who get away with ridiculous billions and billions and billions worth of projects. But every single time there seems to be a political attack, wow, suddenly Jho is there again.

Before, it was Jho boy; he knows too much. Now, it is Arul.

Like Arul whining today — ‘tired, doing more than he had signed up for‘ — and using The Edge as a bullhorn for wanting out, Low turned to Euromoney to deflect his role in looting paradise. The language though was still the Arulian-Wharton sort: woolly. In talking, not once does he give a number (which commands a precision that words can’t, an eternal truth). Nor does he deny the scam. Instead he pointed to the other fellas whereas he — sob, sob, sob — was just the fall guy.

But billions three times over? Was that US dollars or rupiah, Joey boy?

All that remains to be done today is to turn the shell of a company over to a private corporate body or individuals. Better yet, liquidate because something that is nothing attracts nothing. This is the way physical Nature works. The gravity laws: Only a thing with mass pulls to itself other matter.

Either way, that would be Arul’s job.

This has been done before, the 1MDB-PetroSaudi JV most pertinently; here today, gone tomorrow. Why be attached to a thing as a company? It isn’t life. Its use over, take the money, dump it as Low Taek Jho, his Arab friends and others in 1MDB did to Bridge Capital, Blackstone, Brazen Sky, Aabar BVI, PSI Caymans, and so on. Bank accounts, too.

Take 1MDB events the past six months — in particular, Arul stripping 1MDB off of every piece of furniture — and match them to his latest remarks and that of Azalina’s. Then, it is possible to see the sense in Lina’s latest gambit, while the investigations renewed by the Police and by the Attorney General could be allowed to run their course, take Sharol Halmi out to dry and, after which, to find a way to get him out. Here, thus, is probable cause to cut 1MDB loose. Which, really, is a way better than the pronouncements by some Saudi minister or the Attorney General that Najib Razak is innocent of corruption. Nobody believes them anyway.

That way is also better because attached to the charges against Najib isn’t just the money in the bank — the outward, manifested symbol in the morality of 1MDB. No, it is that creature, that Thing itself called 1MDB, train to Paradise, Car in the Great Malaysia Scam, Mother of Frauds. To it is latched monies, deals, bank transactions and, most problematic of all, the morality of its existence.

What might Arul think of the latest idea of Lina’s? What about his own life? His role in it? But, really, What is there to think? Arul might prized himself as some great financial wizard; in another word, a philistine. Indeed, dumb ass reporters go away (easily) impressed by him as a man of confidence, one who knows his work, and by dint of will he can fix things. 1MDB is for him to fix. So cocksure is he in that mission, Arul believes he can even straighten crooked timber.

Baruch Spinoza:

“…the angry boy believes that by free will he wishes vengeance; the timid man thinks it is with free will he seeks flight; the drunkard believes that by a free command of his mind he speaks the things which when sober he wishes he had left unsaid. … All believe that they speak by a free command of the mind, whilst, in truth, they have no power to restrain the impulse which they have to speak.”

That is, Arul’s sense of his work — ‘I didn’t sign up for this‘ — as if he acted out on a choice is, in truth, predicated on his illusions. His notions associated with 1MDB, ‘blame’, ‘praise’, ‘truth’, ‘substantiation’ are fathomable because he knows only things from experiences, any of which has landed him with a false ideal that he is in command of himself. Restated another way, Arul is no model of intellectualism nor intellectual courage, much less is he a Spinozist.

Arul must have thought, as did reporters at The Edge, he did a fabulous job, all that ‘rationalising’. After which, as if to round up a year’s rationalising work, he brags by whining. And that in front of the reporters about ‘possible’ fraud and ‘not signing up’. Lina retorts: that’s your ‘internal’ problem. It must have felt, to Arul, like betrayal. More important than his feelings, What might have Najib thought? But the fault is his: he had forgotten his true mission, itself overwhelmed by the inflated sense of his capability. To Najib, he was just a construction hand, whitewashing; not financial wizardry. In that, Najib doesn’t need an Arul; he has Tim Leissner, Jho Boy; they are a dime a dozen.

So you want to quit? Sure, boy, answers Najib. (Read this for example.) We’ll find you a way to quit.

Arul fails to see that, though his work is nearly over, the worse is not — not for him. Gone off the tracks, the train 1MDB going to Paradise is also going down hill, all the rationalising doesn’t alter the fact. No, rationalizing delivers the opposite to Arul’s intent. Joining a cast of fraudulent characters, beginning with Najib, his ‘rationalization plan’ is nothing but yet another fraud (Stage 3, in the next part of this post), a cover of earlier frauds — indeed, validating them — emptying 1MDB of its baggage, whitewashing its past, then cutting it loose from its moorings. In another word, a lie.

If rationalization was a lie, so were a hundred other things before. Rationalization simply reaffirmed the prior fraud committed in 1MDB: oil fields, strategic investments, assets exceeding liabilities, surplus cash in hand, cash equivalents, ‘level 3 assets’, offshore funds, segregated portfolio companies, after which every sheet of accounting for six years, the investment applications to Bank Negara, Jho Low, Tarek Obaid, a turkey prince, Aabar, Good Star, Blackstone. It just goes on and on and on — as long as Arul’s tongue, a man pretending to be a great specialist finance Fixer but, really, as events have turned out, they show him as just another dumb ass stooge. Like Jho Boy.

To even contemplate that 1MDB, after a make-over, could be resurrected showed he understood nothing from Najib’s instructions (see above). But to admit ‘possible’ fraud he has in fact call out the lies from Azalina Othman, Salleh Keruak, Abdul Rahman Dahlan, Apandi Ali on the MACC investigations, even among Arul partners in IPIC… and after them the minions, from Tan Keng Liang to Ahi Attan.

So that, if all along those were lies, what have they now to say for the truth? Nothing, answers Lina. There is no issue with 1MDB. Nothing happened. Paradise got lost. We’re over it now. Move on.

If Arul had gotten ahead of Lina’s script, admitting possible fraud then asking to leave, the man must be worried. Imagine for a minute his expression still in his office: police, guns, handcuffs, offices ransacked, drawers pried open, files carted off, and then watching the back of Sharol trailing off in his shadows. Spinoza was right: ‘All believe that they speak by a free command of the mind, whilst, in truth, they have no power to restrain the impulse which they have to speak.

Easy it is to appear like a tough, hardened man if Najib felt safe. But, Arul would be quite a different altogether once Najib, feeling on edge, begins lurking behind curtains. If they could throw Sharol under the bus, what might become of him? Might Arul do a Kevin Morais and put everything into a thumb drive then Fedex it off to a safe place? What might it contain?

In Part 2 of this post is, in capsule form, a schematic reproduction of what had gone through 1MDB in the years 2009 to the present. Money is its only preoccupation; that’s what 1MDB is all about, not the ‘synergies’ talked about, the foreign investments, international collaboration, jobs and so on. All lies. There was no great, grand idea that was botched, no Paradise waiting at 1MDB’s train destination. It was simply a scam, right from the opening bell of class. Because so much has been signed away, borrowed, taken out, transferred, so many bank accounts opened then closed, so many companies, so much money, even speeches in fraudulent language (‘high quality asset backed by cash equivalents’), it gets difficult tracking things with dead accuracy. Let’s try anyway, trusting the faith in ourselves.

*

***

This post continues next installment, Paradise Whitewashed, Looted, Part 2.

Dear Mr Jebat:

What’s wrong with me? Since you asked, you tell me.

But before that, also tell me: Is cari makan wrong? I cari lots of makan. You got a problem with that?

I have already said, I have done more than I have signed up for. That is, I cari more than I makan. It is in the nature of the beast. Others might say, an occupational hazard: other than the boss I need to appease, there is the Cabinet, the Attorney General, the Auditor General and all those other Generals. Then there is the Press, the politicians, the MPs, and of course that fella … what’s his name? Pua something. Some Tony on a pony show which I must put up with on a daily basis. Not one day passes will he give me a break.

But, all that I can deal with. Excepting this: cleaning up this shit in this sty called 1MDB. If you think this is an easy job, you do it. Or get Tony.

You see, Jebat, don’t envy me my job, my method of cari, or the diet in my makan. If you think 38,200 ringgit a month is big deal you know nothing about this business. Have you any idea how much those assholes, say, those bank guys in Singapore BSI or in Goldman Sachs make in a month, excluding bonus? Take a guess. Throw a number. Any number. And for what? While I get flogged — daily — they sit in their offices, each day, nine out of ten hours, they make and take phone calls and answer emails. That’s it.

Last year alone that Tim Leissner fella took home 520,000 not ringgit. US dollars. And you mock me for this pittance for my stupidity?

Yes, I was bodoh to have signed up for this. But when the Prime Minister opens his mouth, you think he’s asking? And so there are choices, real choices for a free man? Get real; this is Malaysia. Nobody wants this fucked up job, and if I do it well, and if you don’t like my style, what can I do?

It is just me, man. I’m naturally good in what I do — my second nature, if you will — talking and talking and talking. Blame my parents, if you’re looking for blame. Or blame my Indian-ness, or the snake in that Indian. Blame anything but you can never, never, never fault me for creaming off from this sty.

Face it. In here, in this shit hole, there’s nothing left to steal. All that’s left is a shell and, daily, I can only hear echoes of my own fart. It’s getting useless in here. Even getting out has its huge problems. Do you think, knowing all that’s happened, they will just cut me loose? I will count myself lucky, dead outside a temple; unlucky if I end up in a cement drum. Don’t you get it: I’m stuck here. Even thinking out aloud has limitations. I thought I did get away with it — letting the boss know my wishes, that he might be sympathetic even to just consider, and that there was no other way to say it other than through those stupid reporters. And they thought it was something of a scoop: ‘Arul is tired, Arul wants out, Arul got more than he had bargain for‘. All that yada, yada, yada was just a way of telling the boss. Guess what came back? He didn’t like it one bit. The phone on my hand nearly disintegrated into a thousand pieces, like the day my ex threw the Blackberry into the wall. Dust to dust.

So, you see, you don’t make my life any easier calling me stupid. On the phone, the boss was right: With all this mess and I in the center, who in his right mind will now want me? Who in this fucked-up world will put up with me? You? My reputation is finished, don’t you get it? The better I am at my job, the worse off it gets, and the greater is the disintegration of my life. I am staring at unemployment for the rest of my existence, staring down into an abyss, waking up wondering what the fuck have I got myself into. Perhaps, if it pleases you, I shall throw myself off the cliff. After that, carnations are welcomed but save your tears for Malaysia. I like yellow ones by the way.

Yours truly,

Arul Kanda al Samy

 

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